Warren Snowdon (Lingiari, Australian Labor Party, Shadow Parliamentary Secretary for Northern Australia and Indigenous Affairs) Share this | Hansard source

I am pleased to speak in this debate, although I am not sure that I am pleased to be talking about the matters that I am going to address. The reason for that will become patently obvious as I proceed. I note that the Special Minister of State described Appropriation Bill (No. 3) 2005-2006 and Appropriation Bill (No. 4) 2005-2006 in his second reading speech by saying:

They seek appropriation authority from parliament for the additional expenditure of money from the consolidated revenue fund, in order to meet requirements that have arisen since the last budget.

I, too, would like to raise some concerns about issues that have arisen since the last budget and require the attention of the government in terms of appropriations. The common thread that runs through the issues that I will address is the lack of comprehension by the government of the realities of my electorate and the conditions under which people work, the conditions in which they live and the issues that in the first instance confront people who live in very small and remote island communities in the Indian Ocean. These concerns also reflect the failure of the government to adopt a coordinated approach when it comes to addressing issues that have arisen in my electorate and, indeed, across the north of Australia.

A couple of weeks ago I, along with other members of the Joint Standing Committee on the National Capital and External Territories, was lucky enough to visit the Indian Ocean territories of Christmas and the Cocos islands, both of which, of course, are part of my electorate. In both communities I had extensive discussions with community members, business leaders and religious leaders about matters which were of concern to them. The most outstanding issue was one that was raised on Christmas Island and relates to a heavy lift crane on the Christmas Island wharf. This crane is used for the loading of phosphate mined on the island and lifting the dust bags containing phosphate from the land and putting them on-board ships. We have a problem. The problem is that the crane does not work and there is apparently no timetable for its remediation. That is a major cause for concern.

What happened was largely this: from 2 to 7 January, there was a planned maintenance shutdown for the painting of the crane. On 4 January, they identified cracks in the base footing stools of the crane. On 5 January, Christmas Island ports advised port users that there may be a delay in the use of the port. On 7 January, Favco engineers and welders arrived to address the issue of the crane. On 11 January, Christmas Island ports advised port users that the crane was out of service until further notice. On 13 January, an independent engineer arrived on the island to make an assessment. On 18 January, Christmas Island ports were advised unofficially that they were not to comment on prospects for future use of the crane until the Department of Transport and Regional Services had received a report and taken decisions, and that it would likely be four to six weeks before repairs are made—that was the unofficial talk of the time.

From 18 January to 2 February, the phosphate mining company on Christmas Island contacted DOTARS every two to three days and still found, at the end of that period, that the engineer had not finalised the report and until the report was finalised the department could not make a decision to commission the repairs. We have subsequently learned that that report is still not available—as we understand it. It is certainly not available to users.

We are left in a position where a port which is vital to the commercial viability of the phosphate mining company on Christmas Island is not functioning. This of course has a gravely detrimental effect on the operations of the Christmas Island Phosphate Company. Indeed, the viability of the company has been jeopardised. The major long-term economic activity on Christmas Island is phosphate production. The production and sale of that product depends on exports and the ability to off-load product from the port. Two forms of the product are exported: dust, which is packed into bags which are loaded onto ships by crane; and rocks, which are fed into the holds of ships by gantry. The dust is what I am talking about now.

It has been six weeks since the cracks in the base of the crane were discovered, and the mining company and the community need to know immediately what action the government proposes to take. The government needs to understand the significance of the cost impediments confronting the phosphate mining company and the impact on the future viability of the phosphate mining operation and therefore on the viability of the Christmas Island community as a whole. This afternoon I was told by the chairman of the phosphate mining company that they have a proposal to use an alternative arrangement: loading the phosphate bags from a small jetty onto barges and then transshipping them back onto ships. You do not have to be Einstein to work out the costs in time and money involved in multiple handling—costs which need to be borne by someone.

The Commonwealth, not the mining company, is responsible for this crane. The Commonwealth needs to ensure that the mining company’s operations are not handicapped and that the company does not suffer undue costs as a result of alternative shipping arrangements, which are indeed inefficient. We are told that loading a ship, which would normally take two to three days, could, under the alternative arrangements which are being proposed until a new crane is provided or the old crane is fixed, take six or seven days. The cost of that operation should not be borne by the mining company. Any losses which it incurs as a result of the breakdown of this crane ought to be underwritten in the first instance by the Commonwealth because the Commonwealth is responsible for providing infrastructure. Yet we have not seen from the Commonwealth any explanation as to when this infrastructure will be repaired, how it will be repaired and who is going to take responsibility for the fact that it was broken in the first instance.

We know that the crane was meant to have been fully inspected in April 2005, when its motor was in a state of disrepair. If the crane had been properly inspected in April 2005, you would expect that the fault in the base of the crane would have been identified. That, of course, did not happen. This is a challenge that the government needs to address immediately. It needs to confront the problem immediately. It needs to ensure the people of Christmas Island and the phosphate mining company on Christmas Island that the future of the phosphate mining operation will not be jeopardised because of the faulty crane and that the costs incurred as a result of the alternative arrangements being used while the crane is inoperative will not have to be met by the mining operators or the community but will be underwritten by the Commonwealth.

These people are entitled to a quick response. They are sick and tired of the shillyshallying that goes on when they deal with the Commonwealth government over Christmas Island. They need these assurances immediately. They need assurances that they will not suffer these increased costs. The phosphate mining company need to be able to assure their customers—as I am sure you would understand, Mr Deputy Speaker—that their dust can be placed in the market at the right time and at the right price. They will not be able to do that if this crane is not repaired quickly. I am sure that you and others will understand the importance and the immediacy of this problem. I urge the government to address this matter immediately and to give a proper and appropriate explanation to the community of Christmas Island.

The other matters I wish to raise relate to defence, a subject which I know, Mr Deputy Speaker, is high on your order of importance. A number of times over the past month we have heard about problems in the Department of Defence. On 6 December last year the shadow minister for defence, the member for Barton, outlined that $7.4 billion was missing from Defence’s $17 billion budget in its 2004-05 annual report. The member for Barton then described it as follows:

This is the second year in a row that the Auditor-General has found that the Department of Defence are in breach of section 48 of the Financial Management and Accountability Act 1997.

You may recall, Mr Deputy Speaker, that at the time I pointed out that if this were an Aboriginal organisation the government would have shut it down. No doubt you understand the history of the way in which ATSIC and organisations within ATSIC were treated by the government when they failed financial reporting requirements. But of course there are other issues which have been raised. The media reports over the past couple of weeks concerning defence equipment are very scary. As someone who as late as the end of last year visited our troops in Iraq and previously visited troops in Afghanistan and East Timor, I have to say that I am very concerned about the nature of the equipment which our troops are being asked to use. We now know that there are investigations into faulty defence gear. We see headlines like ‘Faulty gear puts troops at risk’ and ‘Soldiers gagged on gear concerns’. The government should ensure that it addresses these concerns promptly. It is about time that Australian soldiers were able to say with confidence that they are the best equipped soldiers in the world. I have to say now that in terms of their own personal equipment they would be right to say they are not.

Another issue I wish to raise relates specifically to Defence Force personnel in NORFORCE’s Arnhem squadron based at Nhulunbuy. Seven ADF regulars, only two of whom are single men, pay for their own electricity under an arrangement between the federal government and the mining company Alcan negotiated 17 years ago when the company was called Nobalco. The arrangements allow the company to recover the full costs of generation supply of power to all government properties. This makes the Nhulunbuy case an anomoly in the ADF allowances structure. The NT government also has an agreement to pay the full costs of power supply, but it sends out power bills to its staff at the standard domestic rate and then pays the company the agreed rate. This is not the case with the Commonwealth.

Power charges have increased steadily with the increase in petrol prices. Generators are powered by diesel, with a 43 per cent increase between April 2005 and October 2005. Alcan will continue to rely on diesel into the near future. The ADF families are being charged at the government rate of 21.88c per kilowatt hour, plus GST. Customs and Quarantine staff pay the same. This compares with the domestic rate for Nhulunbuy of 11.01c, plus GST—which is not applicable to company staff as the cost of their electricity is part of their pay and conditions—and the commercial rate, which has a sliding scale from 17.97c to 12.5c, plus GST. In comparison, people in Darwin pay around 12c per kilowatt hour for domestic power. Sample bills from two ADF families show a two-adult, two-children family paying $937.70 per quarter and a family of six adults paying $3,150.28 per quarter. If they were charged the domestic rate they would be paying $518.99 per quarter and $1,584.96 per quarter respectively. That is an outrageous discrepancy and a difference that needs to be addressed.

In addition, by way of comparison, it is worth noting electricity costs for Defence families at Weipa in Queensland and Karratha in Western Australia, both of which are largely mining towns. In Weipa the electricity charges are 19.27c per kilowatt hour on the first 300 kilowatts and 13.09c per kilowatt hour thereafter, plus GST. In Karratha charges are 0.25 per connection fee and 13.94c per kilowatt hour, plus GST. A current bill from Nhulunbuy is $937.70 for the consumption of 3,896 kilowatt hours of electricity; a Weipa Defence family would only pay $581.38 and a Karratha Defence family would pay $622.16.

These are anomalies which need to be addressed. In Nhulunbuy, Defence Force homes have been charged at domestic rates rather than the government rate. If they had been charged the government rate, the bill would have been only $471.42. These people should not be disadvantaged in this way by the way in which they are charged for electricity. Clearly families are being charged as if their homes were government offices. The families are getting desperate. The spouses believe that their partners will have no option but to eventually leave the ADF because they simply cannot afford to stay on as a result of the high cost of power combined with the excessive freight charges, contributing to the very high cost of food and groceries.

One of these people said to me, ‘If the word gets around, nobody will want to accept this posting.’ Another said, ‘I can’t afford this; we’ll have to resign if we can’t get this resolved quickly.’ ADF members have written to the minister and to me. They are keeping the army land commander informed and have kept Northern Command abreast of the issue. They are asking for the following: that power is charged at the Nhulunbuy domestic rate, plus GST; that there is reinstatement of an airconditioning allowance for this remote locality as a cushion against fluctuating prices as determined by the mining company; and that there is reimbursement from the government for billings of the government rate backdated to 1 September 2005, when the airconditioning allowance was terminated.

This is a clear sign that the government’s one-size-fits-all approach on these issues does not work. I appreciate that the remote locality conditions have changed in recent times, but what we know on an issue which I have confronted here on a continuing basis—no doubt you have heard me talk about it before, Mr Deputy Speaker—is the effect of these allowances on the fringe benefits tax reporting requirements for Defence Force personnel. In my view, there is simply no reason why we should not have an exemption for Defence Force personnel as far as fringe benefits for reporting requirements are concerned. I am strongly of the view that there should be a blanket exemption for all Defence Force personnel from these fringe benefits tax reporting requirements. This will make a material and dramatic difference to the conditions of service experienced by Defence Force personnel in remote Australia.

Mr Deputy Speaker Lindsay, I say to you as someone with an interest in these issues and a history on them that, if this were done, it would change dramatically the feeling of Defence Force personnel in remote Australia, particularly people based in the Northern Territory. It is something I have discussed here time and time again. The issue of the electricity charges at Nhulunbuy, however, highlights a major problem that the Defence Force need to address. That is that, when they locate Defence Force personnel in these remote areas, they should ensure that they are treated in the same fashion as you would expect other government personnel to be treated if they were working for a state or territory government. The fact is that they have been treated very differently. The fact is that in this instance they are required to pay a lot more for their domestic electricity than they should be paying. It is something which the government needs to address as a matter of urgency.

On the issue of the crane at Christmas Island, it is clear what the government needs to do. Not only does it need to give assurances; it needs to make a very timely intervention to make sure that there is a new crane put in place or that the old crane is repaired as a matter of urgency and that it underwrites any costs which are borne by the mining company of Christmas Island as a result of the failure of this equipment.

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